RIYADH: Kuwait has retained its ‘A+’ long-term credit rating from S&P Global, with a stable outlook, supported by one of the world’s strongest sovereign asset positions despite mounting fiscal pressures.
In its latest report, the US-based agency stated that it expects Kuwait’s economy to grow 2 percent in 2025–2026, rebounding to 2.6 percent in 2027–2028 as oil output rises and infrastructure initiatives under Vision 2035 gather pace.
Kuwait’s strong rating aligns with a broader trend across the Middle East, where countries are steadily advancing economic diversification by reducing their reliance on oil revenues.
In March, S&P Global also upgraded Saudi Arabia’s rating to ‘A+’ from ‘A’, with a stable outlook, citing the Kingdom’s ongoing social and economic transformation.
Regarding Kuwait, S&P Global stated: “The stable outlook reflects our expectation that Kuwait’s public and external balance sheets will remain very strong over our forecast horizon, backed by a significant stock of government financial assets.”
It added: “We expect these strengths to mitigate risks related to Kuwait’s economic concentration on the hydrocarbon sector, potential oil price volatility, and sizable fiscal spending.”
According to S&P, an ‘A+’ rating reflects Kuwait’s strong capacity to meet its financial obligations and indicates a low risk of default.
The report further noted that Kuwait’s fiscal deficits will remain elevated, averaging around 8.9 percent of gross domestic product from 2025 to 2028, as subdued oil prices and high expenditure levels — particularly on wages and subsidies — continue to weigh on public finances.
Nevertheless, Kuwait’s net general government asset stock is projected to average 477 percent of GDP, among the highest ratios globally, supported by sovereign wealth fund assets accumulated since 1953.
“Amid less favorable economic conditions due to global trade tensions and weaker oil prices, Kuwait’s large stock of external public-sector assets should provide a buffer for a policy maneuver, if needed,” said S&P Global.
One key development is the recent passage of the Financing and Liquidity Law, which enables the government to tap capital markets for the first time since 2017.
“Our base case assumes that government capital expenditure and part of the fiscal deficit will be partially funded via debt issuance. We forecast issuance of about $10 billion in 2025 and about $5 billion of debt annually in 2026-2028,” the agency added.
In a separate assessment, Fitch Ratings in March reaffirmed Kuwait’s long-term foreign-currency rating at ‘AA-’ with a stable outlook, citing strong fiscal fundamentals and external liquidity.
Fitch projected that Kuwait’s net foreign assets will rise to 601 percent of GDP in 2025, up from an estimated 582 percent in 2024 — the highest among all Fitch-rated sovereigns.
